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Critics claim Fox's takeover of Sky is 'threat to advertisers'

ISBA has warned 21st Century Fox's takeover of Sky represents a potential "threat to advertisers" and welcomed news that culture secretary Karen Bradley is "minded" to launch a competition investigation.

Sky: 21st Century Fox is offering £11.7bn for the 61% stake in the broadcaster that it does not already own

Mark Finney, director of media and advertising at ISBA, said: "We don’t think the merger is good for advertisers."

The trade body for 400 UK advertisers is one of a string of organisations, including rival media companies, that has made submissions to Ofcom, the media regulator, and the department of culture, media and sport, about Fox's planned £11.7bn deal.

ISBA said the takeover of Britain’s biggest pay-TV firm "threatens unwarranted consolidation of media ownership, representing a possible threat to advertisers" and urged Bradley to refer the deal to the Competition and Markets Authority. She will make a decision after 14 July.

Other critics fear plurality could be harmed if Rupert Murdoch’s Fox teamed up with News Corporation, a separate company that owns The Sun, The Times and the Wall Street Journal but is also controlled by the Murdochs.

One company, whose name was redacted by Ofcom in its report, stated: "The transaction would give Fox/Sky and News Corp increased capacity to advertise to consumers, further draining away advertising revenue from rival producers of print media."

This company added: "this would threaten its [own] business model and potentially reduce media plurality in the UK."

A London School of Economics media policy project paper, which was quoted in the Ofcom report, argued that Murdoch’s acquisition of 100% of Sky would "enhance Fox and News Corp’s ability to combine with Sky to offer discounted subscriptions and maximise revenues through direct payment, thereby disadvantaging independent competitors and ultimately reducing available news plurality".

Fox has offered "undertakings" to protect the editorial independence of Sky News and maintain plurality.

The company has also pointed out that it has been separate from News Corp since 2013 and the media market has changed radically in the last five years as Google and Facebook have gobbled up market share and print has declined by 40%.

Bradley has agreed with Ofcom’s assessment that Fox is a "fit and proper" broadcaster and the deal does not threaten broadcasting standards.

Sky operates in five European markets and the UK is the only country where there is a regulatory hold-up.

"The proposed acquisition has been cleared on public interest and plurality grounds in all of the markets in which Sky operates outside of the UK, including Austria, Germany, Italy and the Republic of Ireland," Fox said, adding it will seek to cooperate with Bradley.